Operator: Good day, ladies and gentlemen and welcome to The Fresh Market's Fourth Quarter and Fiscal 2012 Conference Call. At this time, all participants are in a listen-only mode. Later, we'll conduct the question-and-answer session and instructions will be given at that time.

Before we begin the discussion of our business results, I need to remind you that any forward-looking statements we may make today are subject to our Safe Harbor statements found in our press release and SEC filings. Our fourth quarter earnings release and related financial information, including any non-GAAP or adjusted financial reconciliation tables are available on our corporate website under the Investor Relations section.

After our prepared comments, we will have time to answer questions. Please note that a replay of this call and the Q&A session will be available for 30 days on our website at www.thefreshmarket.com.

With that, let me turn the call over to Craig.

Craig Carlock - President and CEO: Thank you, Sean and good morning, everyone. You likely had a chance to review our press release issued this morning. With our remarks today we would like to recap our fourth quarter performance and provide color on the changing consumer activity we saw this holiday season. We will comment on our full-year fiscal 2012 results and share our outlook for fiscal year 2013.

Let's start with Q4. This morning, we reported fourth quarter earnings per share of $0.43 driven by consolidated sales growth of 15.3% and comp store sales of 1.9%. While our full year comp store sales finished within our plan and guidance range and while we were pleased with our execution during the holiday season, we were disappointed to see our comp store sales growth rate slow this quarter. Similar to other retailers, we saw a pronounced change in consumer behavior this quarter, which caused comparable store sales to come in below trend and contributed to softness in EPS.

To understand better what happened during the winter selling season, we conducted extensive analysis and looked at a broad cross-section of sales data. While we found little evidence of issues with our merchandising or execution during the quarter, we saw relative weakness in comparable sales that was consistent across geographies, categories and store vintage.

We tried to perform our analysis as objectively as possible and we recognize there are always things we can do better. However, our products, prices and promotions were relatively in line with our competition and on par with prior holiday seasons.

The fourth quarter was also our toughest year-over-year comparison for comp sales as we cycled the 7% increase from last year's fourth quarter. During our third quarter call, we communicated that this will present a headwind for us and we were also mindful that the strong momentum that we enjoyed early in the year could be challenged by macroeconomic and political uncertainties.

Transcript Call Date 03/06/2013

Operator: Mark Wiltamuth, Morgan Stanley.

Mark Wiltamuth - Morgan Stanley: Just wanted to ask on your growth outlook, are you including some overhead investments for the West Coast expansion? And also, is there also a drag from ongoing stock-based compensation expense or have you lapped out of that at this point?

Craig Carlock - President and CEO: Okay. The first question on the overhead investments associated with California. I would say we have investments included in the outlook and to some extent included in the actuals for hiring field personnel in the HR function and the store management function and in supervision, so we’ve got those investments that are being made now. Those will support California and in Texas and few other places. So that’s going on and definitely included in the outlook. The stock-based compensation, we have not lapped. We will be entering the third year the four-year program, so there is a headwind until you get to steady state. We’ll hit steady state in fiscal year 2015.

Mark Wiltamuth - Morgan Stanley: Given the difficult year-ago (share) in the first half, should we be thinking something around 1% comps in the first half of the year given the two-year stack that you just posted?

Craig Carlock - President and CEO: I appreciate the question. I really think we ought to just say we've taken a look at current business momentum and our outlook's 2% to 4% for the year. That's really all I think I can say.

Mark Wiltamuth - Morgan Stanley: And is it fair to say your January comp is the best out of the quarter?

Craig Carlock - President and CEO: I think we feel like we had a sudden slowdown early in the quarter (that carried) through the holiday and then we came out a little bit better in January.

Operator: Phil Teroplilli, Longbow Research.

Phil Teroplilli - Longbow Research: Just first question on comparables, you mentioned earlier about a cautious consumer, but are you seeing any changes in terms of competitive activity in any of your markets or maybe competing stores opening nearby that's affecting you?

Craig Carlock - President and CEO: I think the marketplace is extremely competitive. I think we do have competitors that are – and they are very public about how they're going to market and what they're trying to do. So I feel like it is competitive, but I don't think anything changed in the fourth quarter with respect to our competition, nor frankly did we see any change in our own performance relative to where our competition exists and where it doesn’t.

Phil Teroplilli - Longbow Research: Just what's your assumption for inflation embedded in that comparable guidance for this year?

Craig Carlock - President and CEO: We think about cost inflation as we think about our LIFO reserve, and we're using approximately 2%. I think it's…

Phil Teroplilli - Longbow Research: Okay.

Craig Carlock - President and CEO: Okay.

Operator: Mark Miller, William Blair.

Mark Miller - William Blair: Craig, I know you talked about the product and prices being on par with competition, but do have any concerns that perhaps you haven't done enough to shore up the value proposition? The company's had a real strong series of gains in gross margin. So I was wondering if there are any considerations to being more aggressive on price if not reality but just to change perceptions.

Craig Carlock - President and CEO: Well, I think a couple of points. The first one is we are proud of the margin gains, but I'd tell you that we feel like most of those gains are coming from improvements in the deals we strike with the growers, producers and manufacturers of the food and then also distribute the food and then they shrink reduction initiatives that we've talked about. So we do not feel like we're improving our margins at the expense of our price, so I'd also tell you we really held the line on protein prices in the fourth quarter and while we actually did fine on margins in the fourth quarter in the merchandise margin line, we really held the line on protein prices. And then the last point I make is, we talk to customers all the time, we view focus groups, either formally or informally, we enter stores and price is not the top of the list of attributes. The folks we talk to on quality, they want service, they want cleanliness, they want short lines and then we monitor prices very regularly across the broad spectrum of competitors. So we think about it, we ask ourselves a very question you are asking, but we haven't reached the conclusion that that's an issue for U.S.